With franchisees in line, Great American Taco prepares next course

Chef Pat Duran is no stranger to spinning plates.

These days the proprietor of Metropolitan Grill and Metropolitan Farmer is spending a lot of energy on his taco restaurant concept. He’s hired independent franchise consultant Richard Vance, and the duo’s gaining traction on Great American Taco Co.

The single-store brand is seven months into operations at its new 3,000-square-foot space on East Battlefield Road, and a second corporate store is planned in Bentonville, Ark.

“It’s doing so good in Springfield, why not go somewhere else with it?” said Vance, who helped grow the local McAlister’s Deli franchise to six stores.

With a September opening scheduled for the second restaurant, the full-service, fast-casual concept is 30-70 days out from signing agreements that would install additional stores in five states.

Duran, who moved the restaurant from East Sunshine Street to 2915 E. Battlefield Road, said his goal always has been to create a viable food franchise. A third try with the taco concept may be the charm he needs.

The Springfield Gourmet Taco Co. name was the first attempt – after deciding the concept of his previous restaurant, Santa Fe Grill, was too confusing for the local market. “Gourmet” also went by the wayside in favor of the current name; one Duran said doesn’t require an explanation.

“I needed a broad-base name that worked for everything,” Duran said. “When it was time to move and we were having this built, it was time to rebrand.”

Declining to disclose the names of interested franchisees, the total number of locations or the markets Great American Taco Co. would be entering – starting with three restaurants in 2017 – the duo said the company has received interest from groups that already own restaurants.

But more than nailing the menu, Duran said it’s a vibe that the franchisees have to replicate in order to be successful.

“It’s creating an energy and a memory stain that makes people want to come back,” Duran said.

“The No. 1 reason people don’t come back to a restaurant anymore is because they forgot about you.”

It takes two
Making sure customers don’t forget the name – and other restaurateurs don’t steal it – is yet another factor in franchising.

Mary Clapp of Springfield-based Clapp Business Law LLC said in order for a business to expand nationally, franchise disclosure documents and agreements have to conform to Federal Trade Commission regulations, as well as the differences between state laws. Fourteen states require the documentation before soliciting franchisees, and half of those have franchise examiners who review documents for compliance.

Clapp said her firm simplifies the process, charging a flat fee of $13,000 for franchise documentation that is compliant with federal laws as well as those in all 50 states. Throw in three or four figures to register trademarks with the U.S. Patent and Trademark Office plus attorney’s fees, and the price can climb.

“One of the biggest benefits to franchising is brand recognition,” said Clapp, who’s not working with Great American Taco. “If there’s no ability to prevent someone else from doing exactly what you’re doing with the same brand in another part of the country, the value is significantly reduced.”

Mark Siebert, CEO of Homewood, Ill.-based iFranchise Group Inc., which brought Sky Zone and Newk’s Eatery to Springfield and is helping Big Whiskey’s branch out, said the cost for companies to create their model depends on anticipated growth. For conservative businesses pursuing less than 20 new locations a year, Siebert said it can cost less than $50,000 or rise into the $100,000-$150,000 range and above for more aggressive plans.

Siebert said key areas in planning are training programs and operations manuals. He said franchisors should be careful to separate requirements and recommendations for franchisees so as to not create increased liability and risk.

“A franchisor wants to exert complete control over anything that impacts a consumer’s experience,” Siebert said, suggesting closing protocols for staff are better suited as recommendations. “Nobody goes to a particular location for food because of their employee vacation policy.”

Slow burn
For Duran, Great American Taco is a stark contrast to his high-end Metropolitan restaurants in town.

He said calls about franchising began coming in soon after the move – between three and 12 per week – but there’s no rush to cash in on outside interest. Vance said the company isn’t marketing to would-be operators or looking beyond next year’s initial rollout until the Bentonville store is open.

“The groups that we’ve spoken with are willing to wait,” he said. “The ones that aren’t – there’s more fish out there. We’re not begging people to franchise.” Siebert estimates the food service industry represents 40 percent of the market, outnumbered by business-to-business and business-to-consumer services. “More and more, that’s the case across all industries,” he said. “If you’re using a janitorial, maid or lawn care service – chances are it’s a franchise.”

Duran sees a different trend driving his product’s potential viability: the changing racial makeup of the American populace.

“We’re the No. 1 growing population in the U.S., whether Trump likes it or not – that will change the food culture,” Santa Fe, N.M.-born Duran said of his Hispanic heritage.

“Pizza had its day back in the 1980s and has been a mainstay in America a long time now. I think it’s the taco’s turn.”